- The Washington Times - Saturday, February 10, 2007

The Republican primary’s most accomplished supply-sider is the all-but-announced Rudolph W. Giuliani. Having sliced taxes and slashed the city’s government, New York’s former mayor is the leading fiscal conservative among 2008’s Republican presidential contenders.

Before Mr. Giuliani’s Jan. 1, 1994, inauguration, New York’s economy was on a stretcher. Amid soaring unemployment, 235 jobs vanished daily within the city. Financier Felix Rohatyn complained: “Virtually all human activities are taxed to the hilt.” Punitive taxes helped fuel a $2.3 billion deficit.

Mayor-elect Rudolph Giuliani sounded Reaganesque when he announced he would “reduce the size and cost of city government” to balance the budget. In his first State of the City address, he said: “We’re going to cut taxes to attract jobs so our people can work.” Mr. Giuliani spent eight years keeping these promises.

Mr. Giuliani cut or killed 23 levies, saving taxpayers $9.8 billion. Mr. Giuliani pared New York’s top income-tax rate by 20.6 percent. Washington, D.C.’s chief financial officer reported that between 1993 and 2001, local taxes on a family of four New Yorkers earning $50,000 fell 23.7 percent.

Mr. Giuliani cut the commercial-rent tax, curbed sales taxes and curtailed the marriage penalty on taxpaying couples. He proudly shaved the city’s hotel tax from 6 percent to 5 in 1994. Consequently, that tax’s revenues soared from $135 million in fiscal year 1995 to $239 million in 2001.

Mr. Giuliani defends his supply-side instincts with bracing candor. Asked after the September 11, 2001 attack on the World Trade Center’s Twin Towers whether he would raise taxes, he called that “a dumb, stupid, idiotic, and moronic thing to do.”

Mr. Giuliani’s expenditure growth averaged 2.9 percent annually, while local inflation between January 1994 and December 2001 averaged 3.6 percent. His fiscal 1995 budget decreased outlays by 1.6 percent, while his post-September 11, 2002, plan lowered appropriations by 2.6 percent.

Had President Bush followed Mr. Giuliani’s example and limited Washington’s spending to 2.9 percent average, annual growth, the just-unveiled fiscal 2008 federal budget would cost $2.275 trillion, not $2.9 trillion, saving taxpayers $625 billion, the Cato Institute’s Stephen Slivinski estimates. Such Giulianian fiscal discipline would generate a $386 billion surplus, not an anticipated $239 billion deficit.

Mr. Giuliani repeatedly privatized municipal assets. Mr. Giuliani sold WNYC radio for $20 million, WNYC-TV for $207 million and New York’s share of the U.N. Plaza Hotel for $85 million. Divesting the New York Coliseum excised an eyesore from Columbus Circle and added $345 million to city coffers. Mr. Giuliani also let the private Central Park Conservancy manage Manhattan’s fabled urban forest.

These eight years of tax reduction and fiscal responsibility helped hammer unemployment from 10.4 percent in 1993 to 5.7 percent in 2001. Simultaneously, personal income advanced 53 percent.

It’s hard to compare a two-term former mayor, a one-term governor and a four-term U.S. senator. Nevertheless, Cato’s 2006 gubernatorial report card gives former Massachusetts Gov. Mitt Romney a “C.” While the top personal tax rate fell 6 percent on his watch, thanks to a referendum voters approved before he arrived, Mr. Romney’s first budget raised $140 million by closing corporate-tax loopholes. It also featured some $501.5 million of fee increases, including higher marriage licenses (from $4 to $50), pricier gun permits ($25 to $100), a $100 biannual fee for volunteer firefighters (rescinded under pressure), and a $10, previously free, ID card that lets the blind ride Boston public-transit.

Few in Congress expose outrageous federal boondoggles as fervently as does John McCain. However, he is an ambivalent tax fighter. According to Club for Growth research, Mr. McCain opposed President Clinton’s 1993 tax increases and supported his 1997 capital-gains tax cuts. He also voted to extend Mr. Bush’s 2003 tax cuts. For 2005, Mr. McCain earned a 78 percent National Taxpayers Union rating: an “A.”

Unfortunately, Mr. McCain opposed President Bush’s 2001 and 2003 tax cuts. Mr. McCain voted against repealing the Death Tax in 2002. Also, in 1998, Mr. McCain embraced former South Dakota Democratic Sen. Tom Daschle’s motion to approve Big Tobacco’s Master Settlement Agreement, including a $1.10-per-pack cigarette-tax increase.

“I know a lot less about economics than I do about military and foreign policy issues,” Mr. McCain conceded to Wall Street Journal editorialist Stephen Moore. “I still need to be educated.”

Deroy Murdock is a columnist with the Scripps Howard News Service and a media fellow with Stanford University’s Hoover Institution.

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